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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: JANUARY 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NO.: 0-11478
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TCA CABLE TV, INC.
(Exact name of registrant as specified in its charter)
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<S> <C>
TEXAS 75-1798185
(State of other jurisdiction of (IRS Employer Identification Number)
Incorporation or organization)
3015 SSE LOOP 323, TYLER, TEXAS 75701
(Address of principal executive offices) (Zip Code)
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(903) 595-3701
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
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TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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None None
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Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.10 PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
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The number of shares outstanding of the registrant's common stock as of
March 12, 1999 was:
49,684,253 SHARES OF COMMON STOCK.
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TCA CABLE TV, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
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PAGE NO.
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PART I -- FINANCIAL INFORMATION
Consolidated Balance Sheets -- January 31, 1999 and
October 31, 1998....................................... 3
Consolidated Statements of Operations -- Three months
ended January 31, 1999 and 1998........................ 4
Consolidated Statement of Shareholders' Equity -- Three
months ended January 31, 1999.......................... 5
Consolidated Statements of Cash Flows -- Three months
ended January 31, 1999 and 1998........................ 6
Notes to Consolidated Financial Statements................ 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 8-11
PART II -- OTHER INFORMATION................................ 12
SIGNATURES................................................ 13
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
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JANUARY 31, OCTOBER 31,
1999 1998
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(UNAUDITED)
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Cash........................................................ $ 4,495,014 $ 5,763,140
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Accounts receivable, subscribers............................ 21,168,564 18,929,089
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Accounts receivable, other.................................. 1,118,472 1,737,397
-------------- --------------
Property, plant and equipment, at cost:
Land...................................................... 5,296,278 5,241,470
Distribution systems...................................... 462,162,088 444,642,934
Transportation equipment.................................. 17,290,592 16,992,631
Other..................................................... 51,837,684 49,611,572
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536,586,642 516,488,607
Less accumulated depreciation............................. (227,178,029) (217,293,618)
-------------- --------------
309,408,613 299,194,989
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Other assets:
Intangibles, net of accumulated amortization of
$122,823,084 and $117,552,728, respectively............ 724,179,363 731,796,648
Prepaid expenses and other assets......................... 15,191,835 13,351,150
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739,371,198 745,147,798
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$1,075,561,861 $1,070,772,413
============== ==============
LIABILITIES
Accounts payable............................................ $ 20,468,633 $ 15,030,913
Accrued expenses............................................ 32,338,597 30,639,397
Subscriber advance payments................................. 2,703,935 2,530,559
Income tax payable.......................................... 4,131,312 1,225,506
Deferred income taxes....................................... 86,380,000 83,180,000
Debt........................................................ 532,013,802 552,016,193
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678,036,279 684,622,568
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Redeemable minority interest................................ 193,789,952 192,687,542
Contingencies and commitments
SHAREHOLDERS' EQUITY
Preferred stock, $1.00 par value, 5,000,000 shares
authorized; none issued
Common stock, $.10 par value, 60,000,000 shares authorized;
50,126,338 and 50,101,543 shares issued, respectively..... 5,012,634 5,010,154
Additional paid-in capital.................................. 55,525,564 54,823,338
Retained earnings........................................... 151,181,733 143,138,112
Accumulated other comprehensive income...................... 1,525,000 --
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213,244,931 202,971,604
Less treasury stock at cost, 482,516 shares issued.......... (9,509,301) (9,509,301)
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203,735,630 193,462,303
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$1,075,561,861 $1,070,772,413
============== ==============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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THREE MONTHS ENDED
JANUARY 31,
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1999 1998
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Revenues.................................................... $105,398,132 $80,874,131
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Operating expenses:
Salaries, wages and benefits.............................. 19,177,009 15,039,600
Programming and non-cable direct costs.................... 28,506,272 21,859,979
Other operating expenses.................................. 3,193,443 2,869,613
Selling, general and administrative....................... 7,751,973 6,025,408
Depreciation and amortization............................. 15,246,587 11,458,004
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73,875,284 57,252,604
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Operating income.......................................... 31,522,848 23,621,527
Other income................................................ 95,838 1,085,737
Interest expense............................................ (9,251,303) (5,463,352)
Minority interest........................................... (2,752,411) (1,778,709)
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Income before income taxes................................ 19,614,972 17,465,203
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Provision for income taxes:
Current................................................... 4,400,000 3,500,000
Deferred.................................................. 3,200,000 3,300,000
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7,600,000 6,800,000
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Net income.................................................. $ 12,014,972 $10,665,203
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Basic and diluted earnings per common share................. $ 0.24 $ 0.21
============ ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
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<CAPTION>
ACCUMULATED
COMMON STOCK ISSUED ADDITIONAL OTHER
----------------------- PAID-IN RETAINED TREASURY COMPREHENSIVE
SHARES AMOUNT CAPITAL EARNINGS STOCK INCOME
---------- ---------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, October 31, 1998.... 50,101,543 $5,010,154 $54,823,338 $143,138,112 $(9,509,301)
Net income for the three
months ended January 31,
1999..................... 12,014,972
Issuance of common stock... 20,545 2,055 603,982
Stock options exercised.... 4,250 425 51,294
Amortization of warrants... 46,950
Cash dividends at $.08 per
share.................... (3,971,351)
Net unrealized gain on
available-for-sale
securities............... $1,525,000
---------- ---------- ----------- ------------ ----------- ----------
Balance, January 31, 1999.... 50,126,338 $5,012,634 $55,525,564 $151,181,733 $(9,509,301) $1,525,000
========== ========== =========== ============ =========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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TCA CABLE TV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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<CAPTION>
THREE MONTHS ENDED
JANUARY 31,
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1999 1998
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Cash flows from operating activities:
Net income................................................ $ 12,014,972 $ 10,665,203
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation expense................................... 9,917,528 7,879,199
Amortization expense................................... 5,329,059 3,578,805
Gain on sale of assets................................. (95,839) (1,062,404)
Minority interest in earnings.......................... 2,752,410 1,778,709
Employee stock bonus................................... 276,875
Stock warrant amortization............................. 46,950 46,950
Deferred income taxes.................................. 3,200,000 3,300,000
Contribution of common stock to retirement plan........ 329,162 272,898
Changes in operating assets and liabilities:
Accounts receivable, subscribers..................... (2,239,475) 292,162
Accounts receivable, other........................... 618,925 (200,633)
Income tax receivable................................ 529,830
Prepaid expenses and other assets.................... (315,685) 740,420
Accounts payable..................................... 5,437,720 (556,712)
Accrued expenses..................................... 1,699,200 (1,471,945)
Subscriber advance payments.......................... 173,376 (46,899)
Income taxes payable................................. 2,905,806 1,979,861
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Net cash provided by operating activities......... 42,050,984 27,725,444
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Cash flows from investing activities:
Capital expenditures...................................... (20,271,460) (10,906,647)
Proceeds from sale of assets.............................. 2,524,373 3,844,104
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Net cash used in investing activities............. (17,747,087) (7,062,543)
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Cash flows from financing activities:
Borrowings of term debt................................... 10,999,999 177,099,999
Repayments of term debt................................... (31,002,390) (183,102,164)
Debt issuance costs....................................... (8,499,625)
Proceeds from stock options exercised..................... 51,719 266,612
Partnership distributions................................. (1,650,000) (1,650,000)
Dividends paid............................................ (3,971,351) (3,982,618)
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Net cash provided by (used in) financing
activities...................................... (25,572,023) (19,867,796)
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Net increase (decrease) in cash............................. (1,268,126) 795,105
Cash at beginning of period................................. 5,763,140 3,270,190
------------ -------------
Cash at end of period....................................... $ 4,495,014 $ 4,065,295
============ =============
Supplemental cash flow information:
Interest paid.......................................... $ 5,779,404 $ 6,227,409
============ =============
Income taxes paid...................................... $ 1,494,194 $ 990,309
============ =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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TCA CABLE TV, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A. Pursuant to the rules and regulations of the Securities and Exchange
Commission, certain financial information has been condensed and certain
footnote disclosures have been omitted. Such information and disclosures are
normally included in financial statements prepared in accordance with generally
accepted accounting principles.
These condensed financial statements should be read in conjunction with the
financial statements and notes thereto in the Company's latest report on Form
10-K.
The financial statements as of January 31, 1999 and for the three month
period then ended are unaudited; however, in the opinion of management, such
statements include all adjustments (consisting solely of normal and recurring
adjustments) necessary to present fairly the financial information included
therein.
B. The consolidated statements of operations for the three months ended
January 31, 1999, are not necessarily indicative of the operating results to be
expected for the full year.
C. The Company adopted SFAS No. 128, "Earnings per Share" in November 1997.
This statement which replaces APB Opinion No. 15, "Earnings per Share"
establishes simplified accounting standards for computing earnings per share
("EPS") and makes them comparable to international EPS standards.
Basic EPS is computed by dividing net income by the weighted-average number
of common shares outstanding during each period of 49,628,827 shares and
49,769,028 shares for 1999 and 1998, respectively. Diluted EPS is computed by
dividing net income by the weighted-average number of common shares and common
stock equivalents outstanding during the period of 50,257,504 and 50,137,581 for
1999 and 1998, respectively. Common stock equivalents are comprised of warrants
to purchase 322,736 and 187,912 common equivalent shares during the periods
ended January 31, 1999 and 1998, respectively, and options to purchase 305,941
and 180,641 common equivalent shares during the periods ended January 31, 1999
and 1998, respectively. All prior-period EPS amounts presented conform to the
provisions of SFAS No. 128.
D. In June 1997, the Financial Accounting Standards Board issued Statement
of Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income."
SFAS 130 establishes standards for reporting comprehensive income and its
components in a financial statement. Comprehensive income as defined includes
all changes in equity (net assets) during a period from non-owner sources.
Examples of items to be included in comprehensive income, which are excluded
from net income, include foreign currency translation adjustment and unrealized
gain/loss on available for sale securities. For the three month period ended
January 31, 1999, the difference between net income, as reported, and
comprehensive income of $13,539,972 relates solely to the change in the
unrealized gain on the available for sale securities of $1,525,000. There were
no differences between comprehensive income and net income, as reported, during
the three months ended January 31, 1998.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Three Months Ended January 31, 1999 Compared to Three Months Ended January 31,
1998.
Revenues. Revenues increased by $24.5 million, or 30.3%, during the three
months ended January 31, 1999 compared to the three months ended January 31,
1998. Management attributes approximately $4.8 million, or 19.4%, of the revenue
increase to internal growth in cable systems, $15.0 million, or 61.3% to cable
system acquisitions, $4.3 million, or 17.5%, to internal growth in the Company's
advertising insertion business and $0.8 million, or 3.5%, to growth in the
Company's Internet access business. These increases in revenue were offset by a
decrease of $0.4 million, or 1.7%, resulting from the Company's sale of its long
distance business.
Revenues from basic and expanded basic cable television subscriptions
increased $17.0 million, or 34.1%, during the three months ended January 31,
1999 compared to the three months ended January 31, 1998. As a percentage of
revenues, revenues from basic and expanded basic subscriptions increased to
63.4% of revenues for 1999 compared to 61.6% for 1998. Revenues from premium
subscriptions increased $1.8 million, or 19.3%, during 1999 compared to 1998. As
a percentage of revenues, revenues from premium subscriptions decreased to 10.5%
during 1999 compared to 11.5% during 1998. Cable advertising insertion revenues,
including revenues from both the Company's cable advertising business and net
cable advertising revenues from third parties, increased by approximately $3.8
million, or 23.5%, to $19.8 million for the three months ended January 31, 1999
compared to $16.0 million for the three months ended January 31, 1998. As a
percentage of revenues, cable advertising revenues decreased to 18.7% during
1999 compared to 19.8% during 1998. Pay-per-view revenues increased $0.3
million, or 30.7%, during 1999 compared to 1998. As a percentage of revenues,
revenues from pay-per-view were 1.3% for both 1999 and 1998. Other revenues
increased $1.7 million, or 35.7%, during 1999 compared to 1998 primarily due to
acquisitions and an increase of $0.9 million in Internet access revenues. As a
percentage of revenues, revenues from other sources increased to 6.1% in 1999
compared to 5.9% in 1998.
Expenses. Operating expenses increased $16.6 million, or 29.0%, during the
three months ended January 31, 1999 compared to the three months ended January
31, 1998. As a percentage of revenues, operating expenses decreased to 70.1% for
1999 compared to 70.8% for 1998. The increase in operating expenses during the
three months ended January 31, 1999 is primarily due to the acquisition of cable
systems.
Salaries, wages and benefits increased $4.1 million, or 27.5%, during 1999
compared to 1998. As a percentage of revenues, salaries, wages and benefits were
18.2% for 1999 compared to 18.6% for 1998. Programming and non-cable direct
costs increased $6.6 million, or 30.4%, during 1999 compared to 1998. As a
percentage of revenues, programming and non-cable direct costs were 27.1% for
1999 and 27.0% for 1998. The increase in programming costs is the result of
increases of $6.7 million in cable programming costs and $0.4 million in the
Company's payments to other cable operators of a percentage of advertising
sales, offset by a decrease of $0.5 million in network access fees in the long
distance and Internet access business. Other operating expenses increased $0.3
million, or 11.3%, during 1999 compared to 1998. As a percentage of revenues,
other operating expenses were 3.0% for 1999 and 3.6% for 1998. Selling, general
and administrative expense increased $1.7 million, or 28.7% during 1999 when
compared to 1998. As a percentage of revenues, selling, general and
administrative expenses were 7.4% for 1999 and 7.5% for 1998. Depreciation and
amortization increased $3.8 million, or 33.1%, during 1999 when compared to
1998. As a percentage of revenues, depreciation and amortization was 14.5% for
1999 and 14.2% for 1998.
Interest expense increased $3.8 million, or 69.3%, in 1999 compared to 1998
as a result of increased borrowings to fund acquisitions. The Company's weighted
average interest rate was 6.9% for the three months ended January 31, 1999
compared to 7.1% for the three months ended January 31, 1998.
Other Income. The Company's other income decreased $1.0 million during the
three months ended January 31, 1999 compared to the three months ended January
31, 1998. The decrease was due to the sale of the assets of the Company's long
distance business during the three months ended January 31, 1998. The sale
resulted in a gain of approximately $1.1 million.
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Income Taxes. The Company's provision for income taxes was $7.6 million and
$6.8 million in 1999 and 1998, respectively. The increase in taxes of 11.8%
during the three months ended January 31, 1999 compared to the three months
ended January 31, 1998 was a result of a 12.3% increase in income before income
tax offset by a decrease in the effective tax rate to 38.8% in 1999 compared to
38.9% for 1998.
Minority Interest. Minority interest in earnings was $2.8 million for 1999
and $1.8 million for 1998. Minority interest represents the portion of income
before income taxes due to the minority partners in the Company's two
partnerships. TCA Cable Partners is a partnership that is owned 75% by the
Company and 25% by DR Partners, a division of Stephens Group, Inc. TCA Cable
Partners II is a partnership owned 80% by the Company and 20% by TCI American
Holdings IV, L.P., an affiliate of TCI Communications, Inc. TCA Cable Partners
II was formed February 2, 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically been able to meet its current and long-term
liquidity and capital requirements, including dividends and fixed charges,
through cash flow generated from operating activities, existing cash, bank lines
of credit, and other external financing.
Net cash flow from operating activities increased 51.7% to $42.1 million in
1999 from $27.7 million in 1998. The increase was principally due to cable
system acquisitions and internal growth in cable operations and advertising.
At January 31, 1999, the Company had $220.0 million in borrowings under its
bank credit facilities. The Company had $180.0 million borrowed under its
primary credit facility which provides for up to $350 million in borrowings by
the Company and expires on January 31, 2003. The primary credit facility
provides for interest to be paid quarterly at prime or LIBOR plus an applicable
margin. At January 31, 1999 the Company also had $40.0 million borrowed under
additional credit facilities with two banks. The additional bank credit
facilities provide for up to $40.0 million and $4.0 million in borrowings by the
Company and expire June 1999 and April 1999, respectively. During the three
months ended January 31, 1999 and 1998, the Company borrowed approximately $11.0
million and $177.1 million respectively and repaid approximately $31.0 million
and $183.1 million, respectively. In the three months ended January 31,1999, the
Company's bank debt carried a weighted average interest rate of 6.3%.
On September 27, 1989 the Company completed a $100 million private
placement of debt securities due August 1999 bearing an interest rate of 9.0%.
The terms of the securities call for the repayment of principal in semiannual
installments beginning February 1993. In addition on June 23, 1995, the Company
completed a $100 million private placement of debt securities due June 2005
bearing an interest rate of 7.26%. The terms of these securities call for the
repayment of principal in annual installments beginning in June 1999.
The Company believes that EBITDA, defined as earnings before interest,
taxes, depreciation and amortization, and related measures of cash flow serve as
important financial analysis tools for measuring and comparing cable television
companies in several areas, such as liquidity, operating performance and
leverage. The Company's ratio of indebtedness to EBITDA was 3.0x and 2.3x for
the three months ended January 31, 1999 and 1998, respectively. The Company's
interest coverage ratio, defined as the ratio of EBITDA to total interest
expense, was 4.7x and 6.2x for the three months ended January 31, 1999 and 1998
respectively.
The Company's capital expenditures totaled $20.3 million and $10.9 million
in the three months ended January 31, 1999 and 1998, respectively. Funds were
applied primarily toward the upgrade of the Company's cable systems and the
purchase of subscriber equipment, including converter boxes. The Company has
principally financed its capital expenditures through funds generated by its
operating activities, and to a lesser extent, bank borrowings and private
placements of debt securities. The Company expects to continue the upgrade of
its cable systems in 1999 and anticipates total capital expenditure requirements
in fiscal 1999 to be approximately 10% more than in 1998.
As a part of the Company's growth strategy the Company has been actively
acquiring cable systems which meet the Company's acquisition criteria. The
Company has funded its acquisitions through internally generated funds, private
placements of debt securities, bank financing and capital contributions from
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DR Partners. The Company anticipates the acquisitions of additional systems in
selected markets in the future.
The Company paid dividends on its common stock totaling approximately $4.0
million, or $0.08 per share in the three months ended January 31, 1999 and 1998.
The Company believes that net cash provided by operating activities,
borrowings under its bank credit facilities and the Company's ability to obtain
financing will provide adequate sources of short-term and long-term liquidity in
the future.
On February 2, 1998, the Company formed a partnership, TCA Cable Partners
II ( the "TCI Transaction"), with TCI American Holdings IV, L.P.( the "TCI
Affiliate"), an affiliate of TCI Communications Inc. The Company contributed
certain cable systems in Texas and New Mexico serving approximately 155,000
subscribers and $46.6 million in unsecured debt and the TCI Affiliate
contributed its cable systems in north Texas and western Louisiana, serving
approximately 150,000 subscribers and $249.7 million in unsecured debt, in
exchange for an 80% and 20% partnership interest, respectively, in TCA Cable
Partners II. The cable systems contributed by the Company and the TCI Affiliate
are each valued at approximately $315 million. The Company financed the TCI
Transaction with a portion of the proceeds from a $150 million increase in the
Company's primary credit facility and the issuance of $200 million in public
debt. TCA Cable Partners II is consolidated in the financial statements of the
Company and 20% of the estimated fair value of TCA Cable Partners II net assets
were recorded by the Company as a redeemable minority interest at the
acquisition date. The TCI Affiliate has the right to require the Company to
purchase the TCI Affiliate's 20% partnership interest at fair market value
beginning February 2003 through February 2023 (the "Put and Call Period"), the
termination date of the partnership agreement. The Company has a corresponding
right to require the TCI Affiliate to sell its 20% partnership interest in TCA
Cable Partners II to the Company at fair market value during the Put and Call
Period. TCA Cable Partners II is managed by the Company.
On July 24, 1997, the Company filed a shelf registration with the SEC for a
public debt offering of up to $300 million. On February 2, 1998, the Company
issued $200 million in bonds with a coupon of 6.53% and a 10 year put to finance
the TCI Transaction. The Company received a rating of BBB+ from Standard &
Poor's and Baa2 from Moody's. In connection with this debt offering, the Company
entered into treasury lock transactions ( the "Treasury Locks") with a notional
amount of $100 million in August 1997. The Treasury Locks were designated as a
hedge against interest rate changes prior to the closing of the debt offering.
In January 1998, the Treasury Locks were terminated at a cost of $7.9 million.
The cost is being amortized over the term of the public debt as an interest rate
yield adjustment.
YEAR 2000 IMPACT
The Year 2000 will have a broad impact on the business environment in which
the Company operates due to the possibility that many computerized systems
across all industries will be unable to process information containing dates
beginning in the Year 2000. The Company has established a program to prepare its
computer systems and applications for the Year 2000. The Company is utilizing
both internal and external resources to identify, correct and test the systems
for Year 2000 compliance. The Company anticipates that its testing efforts will
be substantially completed by June 30, 1999. Additional validation of the
Company's systems through testing will be conducted throughout 1999. The Company
expects that all mission-critical systems will be Year 2000 compliant prior to
the end of the 1999 calendar year.
Because third party failures could have a material impact on the Company's
ability to conduct business, questionnaires have been sent to substantially all
of the Company's vendors to obtain reasonable assurance that plans are being
developed to address the Year 2000 issue. The returned questionnaires are
currently being assessed by the Company, and are being categorized based upon
readiness for the Year 2000 issues and prioritized in order of significance to
the business of the Company. To the extent that vendors do not provide the
Company with satisfactory evidence of their readiness to handle Year 2000
issues, contingency plans will be developed to obtain qualified replacement
vendors.
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The Company has substantially completed an inventory of all information
technology and non-information technology equipment, and is addressing the Year
2000 compliance of such equipment. The Company currently believes that all items
of mission-critical equipment which are not Year 2000 compliant have been
identified for replacement or upgrade.
Testing and remediation of all of the Company's systems and applications is
not expected to exceed $1 million from inception in calendar year 1998 through
completion in calendar year 1999. Of these costs, approximately $84,000 was
incurred through January 31, 1999. Approximately $0.5 million is expected to be
incurred in fiscal 1999 with the remaining $0.2 million to be incurred in fiscal
2000. All estimated costs have been budgeted and are expected to be funded by
cash flows from operations.
The Company does not believe the costs related to the Year 2000 compliance
project will be material to its financial position or results of operations.
However, the cost of the project and the date on which the Company plans to
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events including the
continued availability of certain resources, third party modification plans and
other factors. Unanticipated failures by critical vendors, as well as the
failure by the Company to execute its plans, could have a material adverse
effect on the cost of the project and its completion date. As a result, there
can be no assurance that these forward-looking estimates will be achieved and
the actual cost and vendor compliance could differ materially from those plans,
resulting in material financial risk.
FORWARD LOOKING INFORMATION
The statements contained in this Quarterly Report on Form 10-Q ("Quarterly
Report") which are not historical facts, including, but not limited to,
statements found under the captions "Financial Condition and Results of
Operations," and "Liquidity and Capital Resources" above, are forward-looking
statements that involve a number of risks and uncertainties. The actual results
of the future events described in such forward-looking statements in the
Quarterly Report could differ materially from those contemplated by such
forward-looking statements. Among the factors that could cause actual results to
differ materially are the risks and uncertainties discussed in the Quarterly
Report, including without limitation the portions of such statements under the
captions referenced above, and the uncertainties set forth from time to time in
the Company's other public reports and filings and public statements.
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PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
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EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<C> <S> <C>
3.1 -- Articles of Incorporation.(1)
3.2 -- Articles of Amendment to Articles of Incorporation.(2)
3.3 -- Articles of Amendment to Articles of Incorporation.(2)
3.4 -- Articles of Amendment to Articles of Incorporation.(3)
3.5 -- Amended and Restated Bylaws.(4)
4.1 -- Form of Stock Certificate.(1)
27.1 -- Financial Data Schedule.*
</TABLE>
- ---------------
* Filed herewith.
(1) Previously filed as an Exhibit to the Registrant's Registration Statement on
Form S-1, File No. 2-75516, and incorporated herein by reference.
(2) Previously filed as an Exhibit to the Registrant's Registration Statement on
Form S-8, File No. 33-21901, and incorporated herein by reference.
(3) Previously filed as an exhibit to Registrant's Form 10-K for the fiscal year
ended October 31, 1993, filed January 27,1994 and incorporated by reference
herein.
(4) Previously filed as an exhibit to Registrant's Form 10-K for the fiscal year
ended October 31, 1997, filed January 27, 1998 and incorporated herein by
reference.
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the period covered by
this report.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
TCA CABLE TV, INC.
<TABLE>
<S> <C>
Date: March 12, 1999 /s/ FRED R. NICHOLS
----------------------------------------------
Fred R. Nichols
Chairman and Chief Executive Officer
Date: March 12, 1999 /s/ JIMMIE F. TAYLOR
----------------------------------------------
Jimmie F. Taylor
Vice President, CFO, and Treasurer
</TABLE>
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<C> <S> <C>
3.1 -- Articles of Incorporation.(1)
3.2 -- Articles of Amendment to Articles of Incorporation.(2)
3.3 -- Articles of Amendment to Articles of Incorporation.(2)
3.4 -- Articles of Amendment to Articles of Incorporation.(3)
3.5 -- Amended and Restated Bylaws.(4)
4.1 -- Form of Stock Certificate.(1)
27.1 -- Financial Data Schedule.*
</TABLE>
- ---------------
* Filed herewith.
(1) Previously filed as an Exhibit to the Registrant's Registration Statement on
Form S-1, File No. 2-75516, and incorporated herein by reference.
(2) Previously filed as an Exhibit to the Registrant's Registration Statement on
Form S-8, File No. 33-21901, and incorporated herein by reference.
(3) Previously filed as an exhibit to Registrant's Form 10-K for the fiscal year
ended October 31, 1993, filed January 27,1994 and incorporated by reference
herein.
(4) Previously filed as an exhibit to Registrant's Form 10-K for the fiscal year
ended October 31, 1997, filed January 27, 1998 and incorporated herein by
reference.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> JAN-31-1999
<CASH> 4,495,014
<SECURITIES> 0
<RECEIVABLES> 21,168,564
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 536,586,642
<DEPRECIATION> 227,178,029
<TOTAL-ASSETS> 1,075,561,861
<CURRENT-LIABILITIES> 0
<BONDS> 200,000,000
0
0
<COMMON> 5,012,634
<OTHER-SE> 198,722,996
<TOTAL-LIABILITY-AND-EQUITY> 1,075,561,861
<SALES> 0
<TOTAL-REVENUES> 105,398,132
<CGS> 0
<TOTAL-COSTS> 28,506,272
<OTHER-EXPENSES> 45,369,012
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,251,303
<INCOME-PRETAX> 19,614,972
<INCOME-TAX> 7,600,000
<INCOME-CONTINUING> 12,014,972
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,014,972
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.24
</TABLE>
